Minister of Jobs, Tourism and Innovation Pat Bell responded today to British Columbia and Canada's total victory in an arbitration panel's ruling on B.C.'s timber pricing policies under the 2006 Canada-U.S. Softwood Lumber Agreement (SLA).

Today's ruling by the London Court of International Arbitration proves that British Columbia's market-based timber pricing policies are fully consistent with the SLA, and that B.C. has always honoured its commitments under the agreement. The arbitration panel dismissed the U.S.'s complaint in its entirety.

A 2011 complaint filed by the U.S. alleged that B.C. was selling softwood at less than market value, given an increase in the harvest of low-grade timber. The increased amount of low-grade timber in B.C. is the result of the unprecedented and devastating mountain pine beetle infestation. B.C.'s auction-based pricing system ensures that the full value of timber has been captured by government.

B.C. and Canada have maintained it would have been far more productive for the U.S. lumber industry to join them to increase demand for wood products across North America, such as what B.C. is doing with its Wood First initiative.

In the meantime, British Columbia has diversified its lumber export markets during the arbitration period. As part of 'Canada Starts Here: The BC Jobs Plan' and through recent trade missions abroad by Premier Christy Clark and Bell, the B.C. government has focused on developing Asian markets, experiencing tremendous growth in recent years. For example, B.C. has more than doubled its lumber exports to China each of the past three years, helping to put people back to work in mills throughout the province.

B.C. will continue to support the SLA, originally signed in October 2006, to create a predictable trade environment and to provide stability and certainty to producers and consumers on both sides of the border. Canada has signed an extension to the agreement to October 2015.

Quotes:

Minister of Jobs, Tourism and Innovation Pat Bell -

"This is a total victory for British Columbia and Canada and is great news for B.C.'s lumber workers and their families. Our government has worked hard to defend and create jobs for British Columbians and to demonstrate that the U.S.'s complaints were unwarranted and groundless."

Learn More:

• To find out more about the Softwood Lumber Agreement, visit: http://www.jti.gov.bc.ca/softwood/index.htm

A factsheet follows.

Contact:

Media Relations
Government Communications and Public Relations
Ministry of Jobs, Tourism and Innovation
250 356-8177

FACTSHEET

• The Canada-United States Softwood Lumber Agreement came into effect on Oct. 12, 2006.
• The agreement was initially set to expire in October 2013. In January 2012, Canada and the United States agreed to an extension to October 2015, under the same terms and conditions.
• On Jan. 18, 2011, the United States launched a dispute on B.C.'s Interior timber pricing policies, requesting arbitration and alleging that the increase in the harvest of low grade timber has subsidized B.C. softwood lumber producers.
• A final hearing in front of the arbitration panel was held from Feb. 27 to March 8, 2012. Canada and the U.S. filed their separate post-hearing briefs on May 24, 2012. A final decision was issued by the London Court of International Arbitration (LCIA) on July 18, 2012.
• Dispute settlement under the agreement is handled by the LCIA, whose ruling is final and binding.
• The SLA has been beneficial to industry in B.C. and Canada, enabling the province to manage its forest resources while maintaining access to the U.S. market. The SLA also provides an independent and objective body to rule on softwood lumber trade disputes.
• Also, the SLA has facilitated the return of over $5 billion to Canadian lumber exporters - about half to B.C. exporters. Under its terms, money collected from export charges remains in Canada and is subsequently distributed to provinces. B.C has received $1.1 billion from export charge revenue from the SLA as of March 2012.
• Softwood lumber is an important sector of the Canada-U.S. bilateral trade relationship. The total volume of B.C.'s softwood exports in 2011 to all world markets was 22.83 million cubic metres, with roughly half exported to the U.S.
• The total value of B.C.'s softwood lumber exports to all world markets in 2011 was $3.83 billion, with $1.6 billion to the U.S.
• In 2011, B.C. produced 12.354 billion board feet in softwood lumber.
• Over 53,000 people are employed in B.C. in the wood products industry and its supporting industries.
• As of May 2012, the total volume of B.C. exports of softwood lumber was up nine per cent for the year-though-May, as compared with the same period in 2011. The total value of B.C. exports of softwood lumber year-through-May 2012 grew 2.5 per cent compared with 2011.
• The U.S. market continues to show signs of recovery with year to date volume and value up almost 9 and 11 per cent, respectively, over the same period last year.
• Exports to China, B.C.'s second largest and fastest growing market, held steady month to month. After more than doubling each of the past three years, year to date volume is up 13 per cent and B.C. is still on track for modest growth through 2012. Exports to Japan and India are also on the rise.

Contact:

Media Relations
Government Communications and Public Relations
Ministry of Jobs, Tourism and Innovation
250 356-8177